Colorado Springs Real Estate and Community

 

 

April 24, 2018

One Way To Buy A Cheap House

 

 

One of the simplest ways to buy a cheap house is to make a low offer. Sometimes called a "lowball" offer, this is a basic ploy used in real estate and many other negotiations. Everyone knows the technique, but most are afraid to use it. It can be a waste of time if you don't do it right and it can be embarrassing, but it also can get you a cheap house.

A very successful real estate investor once told me, “If you aren't embarrassed by your offer, it isn't low enough." He's made millions in real estate, so I think he's worth listening to. However, you need to understand that a truly low offer isn't going to be accepted most of the time.

In fact, it will almost never be accepted. Does this mean it is a waste of time? Not at all! There will often be counter-offers, and a low initial offer is just a way to alter expectations.

Buy a Cheap House by Lowering Expectations

Once, when I was selling my car, a really nice guy looked at it. After crawling under and inside the car, he politely offered me half of what I was asking and left his phone number (I said no). I wondered what was wrong with the car, and I found myself hoping I could get just a bit more than that half-price offer. My expectations had been altered quickly. Fortunately for me, another person gave me the full asking price before I decided to pick up that phone.

The idea of a low offer then is to alter expectations. If a seller is asking $200,000, and you offer $160,000, will he accept your offer? No. He'll almost certainly reject it. Buying a cheap house isn't going to be as easy as that.

However, he may counter-offer. Now suppose you go back and forth, and eventually agree to $182,000. He not have considered going this low before, but now it seems like a victory to him after starting at $160,000.

The downside! You will lose a lot of potential homes this way. Some sellers won't even take subsequent offers seriously once you have offended them with your extreme offer. This then is a technique to use when you have time to find that home, and really want the best deal you can get.

One investor in California routinely made dozens of offers at a time on houses. He didn't even look at them but wrote the offers for 25% less than the asking price (he did include an inspection contingency to protect himself). Most of the sellers said no - most, but not all. He repeatedly got great deals in this way. That's one way to buy a cheap house.

 

Posted in Buying a Home
April 23, 2018

No More Estate Agent Fees

 

"A poll of over 100 office appraisers, brokers, and developers, discovered that 54 percent think office condominiums are a style that will end once interest rates go up.

The typical scenario finds companies buying the condos so they won’t have to pay rent again, giving them better control over space and residence costs. More and more office condos have been bought as savings lately.   Phoenix is one of the largest markets in this niche, with 189 office-condo assets in place and over 100 others in various phases of development.   But, other markets, such as Houston, with just three office-condo properties, hardly register, despite the fact that Texas City’s office sector is three times bigger than Phoenix's. "

Of a particular note are in offices condos that are bought as investments.  Numerous real estate investors, including me, have financed these types of properties, just to get few if any potential tenants for the vacant space.  In a market with the vacancy rate is moving between 15% and 20%, I felt it was wise to move out as quickly as possible.  I’m very happy I did. 

It’s not the value of the space that is the problem, but the fact that any renter that is a good candidate for this space will always simply buy their own office condo.  Many of the forecasts for open the office condo space are beginners or small companies that can only pledge to a one- or two-year contract.   These companies will either profit and get their own office condo or fold up shop and leave back to the extra bedroom home office from where they came from and abandoning the investor to attempt finding another tenant. 

Make no mistake; these are nice properties, well developed with excellent finishes that are exceptional values for the owner/user.  As an investor, I would find other areas, precisely industrial or warehouse properties, to invest my funds.

 

Posted in Buying a Home
April 22, 2018

No Money Down - Really?

 

No money down may mean no down payment. That's what most people think it means. A seller really agrees to get nothing at closing is uncommon, though. Most sellers want something as a down payment. They want a small thing to show for the sale and even may want it only cover their closing costs, like paying the real estate agent.

Also, most banks won't finance the entire purchase price of a property. This is especially true of real estate that is purchased as an investment. The bank won't loan you 100%, and the seller needs something as a down payment, so how do you buy real estate with no money down?

By understanding what the parties involved really want, and giving it to them. The bank wants a secure investment, meaning the property is worth more than what they are loaning on it. The seller may want enough money to move or may want to finance the property to get a good return on his equity. He may just want all of his money out of it now. The idea, then, is to look for a way to provide him (and/or the bank) what he wants, but putting none of your own money into the deal.

As you can see, no money down refers to the down payment that won't come from your own money. Where will you get the money? Wherever you can, it’s time to get creative.

No Money Down Example

Recently, an investor told me that he had found a fixer upper, but couldn't arrange to finance. What did he do? He assigned the contract to another investor who was at our real estate club meeting, for $6,000. All he ever had into the deal was a $500 "good faith" deposit, and this could have been from a cash advance on a credit card. The other investor saw the potential to make $20,000 on the property, so he was happy to pay $6,000 to take this man's "position." This is called "flipping."

The new investor had the ability to finance the deal, so the seller got his cash. The bank had a good loan, especially considering that the home value would be improved with the rehabilitation. The key here was that the first investor knew how to find a good deal, and he included in his offer the right to assign the contract to another investor (or take on a partner) if he wanted to.

No Money Down Ideas

Suppose you wanted to complete the purchase, renovation, and sale with zero down, and none of your own money invested? One way would be to find a partner. We were recently talking to an investor who wants to use our money to complete the profitable renovation of a property. We would like a share of those profits. If a deal is good, there are people who want to bring their money into it.

Another Example of No Money Down Payment

Here is another example. Suppose you find an owner who is tired of being a landlord. He wants $80,000 for his run-down house. With $6,000 worth of clean-up and repair, it could sell for $116,000. Your total costs (including closing and holding costs) would be around $11,000, leaving $25,000 potential profit in the deal. That sounds good, but what can you do with no money?

You could offer the seller more than he wants. For example, offer $85,000, using a $500 credit card cash advance for a good faith deposit. Your offer, however, is for $5,000 down, with no monthly payments, and the entire remaining balance to be paid within one year, with 7% interest. Why should he agree?

As you would carefully explain, he'll get more than he wanted - and a few thousand in interest too. His collateral will be safe since unlike his renters who ran the place down, you'll be pouring money into fixing it up. He'll have a first mortgage on a home that will soon be worth much more than what he is owed.

Okay, so he agrees (if not, find another seller and another until one does agree). Now how do you find the $5,000 for the down payment, plus the $11,000 for repairs and holding costs? Find an investor who has about $16,000 to put into the deal. No money down for you, and half the profits for him. Complete the house quickly and on a budget, and you'll get over $10,000 profit each.

Notice that the seller gets more than he is asking, and the other investor gets a great return on his investment. You make more than $10,000 without investing a penny. Find out what everyone wants and create a way for them to get it. This is the surest way to make a deal work with no money down.

 

Posted in Buying a Home
April 21, 2018

New Kitchen For Added Sales Punch

 

If you are going to list your home for sale and want to give it that added punch, why not consider a new kitchen? Kitchens are a good place to begin renovation because they are simply the most social room in the home and they also have a good amount of variety for an expression of style.

Additionally, this room includes many appliances and counter space than any room in the home. These appliances can get run down, countertops can get damaged and stained over the years, the kitchen simply makes sense as the main area to reinvent.

The essence of any new kitchen will likely be the replacement of the major appliances. The stove or range top, dishwasher, sinks, fridge, and fixtures. These are the things that you will want to theme your kitchen around. The color of the appliances should of course match; stainless steel is the current favorite. Next, try to match your new countertop up with the color of the appliances.

Perhaps the most desirable surface being used for countertops these days in natural granite. However, solid countertops can get quite expensive. There are more moderately priced options that mimic the look of granite at a fraction of the cost.

While you are at it, you might want to consider redoing the floors too. The most traditional style of flooring for kitchens is a linoleum or vinyl, but these surfaces have lost their dominance of the market in favor of more stylish surfaces like tile or laminate. Tile is a great surface for kitchens as it is highly resistant to wear and is completely waterproof.

Also, there is a stunning variety of styles and colors to choose from so you can create any look for the kitchen that you can imagine. One simple fact is true, good kitchens sell homes. So don't cut corners when restyling your kitchen.

 

Posted in Real Estate News
April 20, 2018

New Homes vs Existing Homes

 

New Homes

Newly built homes have top quality control standards, new construction techniques, as well as better energy efficiency when compared with older homes. They sometime carry a one year or more guarantee and good investment options. The disadvantage is that though they are less stressful to get into, it is very hard to sell them for a few years (particularly if the builder is still in the subdivision), and the last price is always higher than older home (though they regularly need very little up-front money and many builders will offer thousands of dollars of improvements and incentives).

The neighborhood will not be established, there will be small shade trees like in an older neighborhood, and it will have more of a frontline feel. If you like “new” and “sparkling” like new car, then the clean scent of a new home will be your thing.

 

Existing Homes

These are owned by property holders who want to sell their homes. They have been seasoned, and may be better built than newer homes. Many people like the fact that they have the charm and history of having been lived in - in fact, many buyers think that a new home is "cold" if it hasn't been lived in.

Their age gives them morality, and they are in well-known neighborhoods with tall trees and reputable neighbors and schools. They may be funky or customized with exciting quirks. These are for people who like "well-known" OR "different."

They are much easier to sell off immediately after you buy one. Many also have a one year guarantee. They may not appeal to people who like being the first in a home or who want one built especially for them.

Which do you like better - New or Existing? People who like one may not like the other, though there are many exceptions who like both.

Posted in Buying a Home
April 19, 2018

Negotiating Real Estate - Go Slow

 

Negotiating Real Estate - Go Slow

Why would you from time to time go slowly when negotiating real estate deals? It's all about the power or time investment. Let me clarify with a story.

One of my less-pleasing experiences selling real estate was when I sold a property for a very good guy, and he was a lawyer. I was still new to real estate, and this lawyer knew all the angles. Without getting into all the dirty tricks he used, I'll just say that the buyer had everyone involved angry, frustrated and worn down.

As a final blow, he arbitrarily decided that he wanted the price lowered by another $5,000. Now that's hardball negotiating. The seller was almost ready to throw away the whole deal, but he had been trying to sell the home for two years, and we had been working with this buyer for months. None of the brokers or agents involved desired to see all their effort turn out to be nothing.

There were three agents below two brokers involved in the sale. We all settled that taking legal action against the buyer wasn't worth it. Instead, we gave in. The seller had enough of the buyer’s deceits, so each of the other five parties to the sale (2 brokers, 3 agents) settled to each let a $1,000 of the commission go, just to close the deal.

This is an extreme example of using "time investment" to your advantage. After putting so much time, none of us wanted to lose the whole thing. The lawyer knew that and used it. In this instance, there was nothing in the contract that permits him to negotiate the price again, making it wrong in my mind. Still, it turns out effective.

Negotiating Real Estate Deals - Ethically

In other scenarios, it is just decent negotiating. If you want to get the best price on a car, do you think you'll get it after spending two minutes with a salesman? Let him invest two hours showing you cars, and he'll be begging the manager to let the car go for your low offer. The same is true with real estate negotiation.

Remind the seller about time, to let him remember the time he has already invested. To do this politely, say something like "Look, neither of us wants to lose the time we've spent on this and start all over, so why don't I..." Then offer some small concession.

He is slightly cautioned that he could lose his entire investment with nothing to show for it. The words "start all over" may even scare him. You set the prospect, and then you provide a way out. This is not offensive as well when done right. You say "Neither of us..." to let them know you're both in the same situation, and it's not just you threatening them.

This is, of course just one technique of many for negotiating real estate deals. Take the time to learn several, at least.

 

Posted in Selling Your Home
April 18, 2018

Mortgage and Real Estate Information for Debtors

 

In case you owing money and have a low average credit score you may find it hard to catch a mortgage loan. Regarding these facts, it may interest you to ask an eligible real estate agent to assist you in finding a home.

These estate agents always have a database of houses that start from bad credit approval, land contracts and so on. The real estate agent may assist you to find a home you can buy notwithstanding how low your credit could be.

If you have outstanding debt, the lender will inquire about your credit history and debts incurred. The lender will ask if you have any outstanding loans, and if so, what amount do you pay monthly. In other words, if you have car loans, you will need to supply the balance owed and the amount paid monthly toward the loan.

Lenders will inquire about credit card debts. If you answer yes, then the lender will want to know how much you pay monthly. Generally, the lender will also ask how much monthly do you spend on sustained debts that originate from your pretax salary on credit card repayments etc.

It is a must that you answer questions relating to assets, which comprises cash at hand. The underwriters will examine information pertaining to the questions.

For example, they will examine and ask, "What is the estimated amount in your banking account?" How many funds will be available in your account after you have paid closing fees, down payment costs, and other fees applicable to mortgage loans? Do you have a saving account?

The lender will ask how much cash do you intend to apply for the loan. The lender may ask also if the down payment is money coming from your pockets. If the answer is no then the lender will ask where the money is coming from...

Loan Purpose

The loan purpose is of interest to the lender. Thus, you will answer questions concerning the reason for the loan, which will include, are you refinancing a present home, or are you a new buyer?

Refinancing Mortgage

If you answer the question relating to the loan, permitting the lender know that you intend to refinance a current home with the money borrowed; the lender will inquire, "Do you require cash at closing to repay debts? Obviously, the question that comes next is, "How much" cash will you need to pay off the debts?

Property Purpose

The lender will need information concerning the home's purpose. Do you plan to use the home for work or residence? Is the loan planned to invest in the property?

Type of Property

The mortgage lender will also need to know if the home is duplex, condominium, or single-family housing.

 

Posted in Buying a Home
April 17, 2018

Real Estate Broker, Buyer, and Seller Agent

 

Real Estate Broker, Buyer, and Seller Agent

Food, shelter, and clothing are man’s basic necessities.  The priciest of all of these necessities is a shelter.  The shelter consists of the immovable property or real estate property, which is the land.  Real estate, however, includes not just the land but it also includes the permanent manmade fixture such as the house.

Real estate ownership, especially for first-time buyers, is such an important decision to make.  This is because having your own house is the greatest American dream. 

For first time buyers, the services of a real estate broker are very important.  This is due to fact that most of the information you required may be gotten from an expert and a trustworthy real estate broker. 

A real estate broker services begin by discussing the locality, price, and size of the property the customer wants.

The real estate brokers will then shop around and look for the property that fit those requirements.  A reliable real estate broker will trim down the choices to a few that closely meet the requirement of the buyer. 

This will minimize the need for the buyer to travel around looking at various properties that may not be what they want.

Upon the recommendation of the real estate broker, the buyer will then visit the few that the brokers recommend.  In this case, the broker and the buyer will discuss the property they choose, including how to bridge the gap between the asking price and offer of the buyer. 

Once the seller agrees the real estate broker then moves to review the documents and the title for purposes of finalizing the purchase of the property.

Some real estate brokers continue to help the buyer up to the time they move to their new house.  Reliable real estate brokers help buyers up to this extent.

It may also help to realize that reliable and professional real estate brokers will help you negotiate for the purchase price without thinking of their commission because their commission comes from the seller’s profit and the total commission is divided among the listing agent and the broker.  The broker may, therefore, be able to negotiate to the buyer’s advantage without prejudice to his commission.

Buyers thus benefit from the services of the real estate broker.  Sellers also take advantage of real estate brokers to market their properties and find a suitable buyer. 

It is thus helpful if you can find a professional real estate broker because they will be able to find the best property that suits you.  This is because they know what is happening in the industry from sides, the buyer’s and the seller’s side. 

If you want to buy or sell a property, log on to the internet and check out where you can find reliable and professional real estate brokers.

It is always advantageous to hire those experienced brokers to help you find the property that will give you the roof over your head.

 

 

April 16, 2018

Real Estate Broker

 

A real estate broker is a term in the joint States which explain a party who acts as an intermediary between wholesaler and buyers of real estate (or real property as it known elsewhere) and attempts to find sellers who wish to sell and the purchaser who wish to buy.

The association was first established by reference to the English common law of agency with the broker having a fiduciary association with his customers in the United States.

An estate agent is a term used in the United State to describe someone or group whose trade is to sell real estate for their clients; however, there are significant differences between the liabilities and trial of estate agents and brokers in the different country.

Outside the US, other countries take openly different approaches to the promotion and selling of real property.

In the US, real estate brokers and their salespersons (normally called "real estate agents" or, in other states, "brokers") help homeowners in selling their property and marketing it for the highest price possible and under the best terms.

When stand-in as a Buyer's agent with a symbol agreement (or, in many scenarios, oral agreement, although a broker may not be legally eligible to his commission except the agreement is in writing), they help buyers by assisting them to buy property for the lowest possible price under the best terms. In absence of a signed agreement, brokers may help buyers in the acquisition of property however still represent the seller and the seller's advantage.

In many jurisdictions in the United States, an individual is mandatory to have a license in order to get a commission for services rendered as a real estate broker. Unlicensed activity is unlawful, but sellers and buyers acting as basic in the sale or purchase of real estate are not permitted to be licensed. In some states, lawyers are allowed to handle real estate sales for a profit without being licensed as agents or brokers.

 

Posted in Real Estate News
April 15, 2018

Real Estate Houses – Foam and Concrete Walls?

 

I understand that houses are being made with concrete/foam block walls.  This newer technology increases the energy efficiency, security and strength of houses.  This new design is part of a construction method called stay-in-place-forms or insulated-concrete forms.

 

This construction creates one of the strongest and most energy-efficient houses that are possible today.  The walls can resist hurricane force winds.  Concrete itself is not a good insulator.  When the concrete is encased in foam, you gain energy efficiency.  The concrete itself provides the strength and helps reduce the amount of noise that penetrates the walls of the house.

 

Energy efficiency is enhanced when air leakage in and out of the house is reduced.  Since the house is built with concrete, it will remain airtight over time since concrete does not settle.  While the walls will be thicker than normal, this won’t be noticeable.  Should you look closely at the window and door openings, you will see they are slightly wider. 

 

Currently there are several designs of houses available.  One company has a system you can use for floors.  The cost will be determined by the quality of the insulation that is used.  The higher level will cost more.  As the technology catches on and is used more, the costs associated with it will decrease.

 

Posted in Real Estate News